Economic growth in country X has created many opportunities for new businesses such as TGH. TGH manufacture a range of personalised mobile phone cases using job production. Quality assurance is important to all 8 employees. TGH operate in a niche market. The Marketing Manager uses e-commerce as TGH’s channel of distribution. She is considering ways to build customer relationships. Define ‘economic growth’. Define ‘quality assurance’. Outline two reasons why building customer relationships might be important to TGH. Reason 1: Reason 2: 1 3 Explain one advantage and one disadvantage to TGH of using job production. Advantage: Explanation: Disadvantage: Explanation: Do you think cost-plus is the best pricing method for a new business to use when selling products to a niche market? Justify your answer. 1 3

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THEORY

2021

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Pamela is a successful entrepreneur. She is the owner of a gift shop selling celebration cards, toys and candy . When Pamela started her business 30 years ago she had no help to manage the shop. She now has 5 employees. Pamela knows maintaining customer loyalty is important. She uses competitive pricing. Most of her marketing budget is spent on sales promotion. Pamela does not use e-commerce. Define ‘competitive pricing’. Define ‘marketing budget’. Outline two possible threats to Pamela’s business of using e-commerce. Threat 1: Threat 2: 1 1 Explain two methods Pamela’s business can use to maintain customer loyalty. Method 1: Explanation: Method 2: Explanation: Do you think being a risk-taker is a more important characteristic of a successful entrepreneur than being creative? Justify your answer. [ 1 1

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THEORY

2022

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Mayfair Solutions, a public limited company, develops software packages for customers. The staff it employs are highly paid, but Mayfair Solutions believes that this is money well spent. The company has to keep updating its software packages because customer requirements keep changing. The software market is very competitive. What is meant by the term ‘public limited company’? Identify two features of a very competitive market. Feature 1: Feature 2: Identify and explain two possible reasons why the staff at Mayfair Solutions are paid high wages. Reason 1: Explanation: Reason 2: Explanation: Identify and explain three problems that the need to keep updating its software packages may create for Mayfair Solutions. Problem 1: Explanation: Problem 2: Explanation: Problem 3: Explanation: Mayfair Solutions has recently received a takeover bid from a large rival software company. Do you think that this takeover would benefit both employees and shareholders of Mayfair Solutions? Justify your answer.

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THEORY

2011

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Sunil is a sole trader. He likes owning a small business. His shop sells low price raincoats. Sales vary throughout the year. The market for raincoats is competitive, but as Sunil makes a profit he doesn’t think competition is a problem for his business. In order to protect consumers, the Government of Sunil’s country has recently introduced new laws to protect consumers. What is meant by ‘profit’? Identify two factors which could affect demand for Sunil’s products. Factor 1: Factor 2: Identify and explain two reasons why profit is important to small businesses like Sunil’s. Reason 1: Explanation: Reason 2: Explanation: Identify and explain one way in which consumer protection laws might affect Sunil’s business and one way consumer protection laws might affect his customers. Way consumer laws affect Sunil’s business: Explanation: Way consumer laws affect Sunil’s customers: Explanation: Do you think the advantages of owning a small business are greater than the disadvantages for Sunil? Justify your answer.

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THEORY

2012

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GKA is a food retailer. It has 300 shops located in areas where average consumer incomes are low. GKA sells a limited range of own-label products including breakfast cereal and toothpaste. GKA does no promotion or market research. The Managing Director said: ‘Last year our market share increased to 5%. Profit increased by 40%. Keeping costs low means GKA can offer customers quality products at low prices.’ GKA is planning to open 100 shops in areas with high average consumer incomes.The Managing Director must decide whether GKA should change its pricing strategy as the business expands. What is meant by ‘market share’? Identify two aims of promotion. Aim 1: Aim 2: Identify and explain two methods of market research that GKA could use. Method 1: Explanation: Method 2: Explanation: 1 1 Identify and explain two ways in which GKA could keep costs low. Way 1: Explanation: Way 2: Explanation: Do you think GKA should change its pricing strategy as the business expands? Justify your answer. [ 1 1

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THEORY

2018

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Wilde Soup Stop (WSS) makes a range of soups and hot drinks. It owns 30 shops and has sold its franchise to 10 other shops in country Z. The Marketing Director said: ‘Results from our focus group show that being an ethical business is important’. WSS plans to extend its product range to include curries and cakes. WSS will need to change its brand image. The Marketing Director cannot decide whether to use sponsorship or newspaper advertising as the main method of promotion. Fig.1: Existing logo for WSS Identify two ethical issues for a business. Issue 1: Issue 2: What is meant by a ‘focus group’? Identify and explain two advantages to WSS of selling its franchise. Advantage 1: Explanation: Advantage 2: Explanation: 1 4 Identify and explain one advantage and one disadvantage to WSS of changing its brand image. Advantage: Explanation: Disadvantage: Explanation: Do you think WSS should use sponsorship or newspaper advertising as the main method of promotion? Justify your answer. [ 1 4

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THEORY

2017

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Gayle’s Soaps is a business which manufactures health and beauty products. Its market share has remained constant at 15% despite new businesses entering this market. The business uses market segmentation. Most of its customers are women. The Marketing manager believes the company could increase its profits if it increases the price of each of its most popular products. What is meant by ‘market share’? Identify two ways (other than gender) that Gayle’s Soaps could segment its market. Way 1: Way 2: Identify and explain two advantages of market segmentation for Gayle’s Soaps. Advantage 1: Explanation: Advantage 2: Explanation: Identify and explain three problems that a business might have when trying to enter a new market. Problem 1: Explanation: Problem 2: Explanation: Problem 3: Explanation: Do you think that if Gayle’s Soaps decides to increase prices then this will lead to higher profits? Justify your answer.

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THEORY

2013

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Travelscene is a company that specialises in holiday tours for people with interests in sport. It arranges trips like ski holidays and group visits to major events such as the Olympic Games. This is a niche market. Travelscene is a very profitable business. The company has an excellent reputation as an efficient business. It employs experienced tour managers who look after the needs of tourists during their trip. It currently has a vacancy for a tour manager. What is meant by the term ‘a niche market’? What is meant by ‘an efficient business’? Identify and explain two qualities that a new Travelscene tour manager will need. Quality 1: Explanation: Quality 2: Explanation: Identify and explain three possible reasons why Travelscene is a very profitable business. Reason 1: Explanation: Reason 2: Explanation: Reason 3: Explanation: The management of Travelscene is thinking of starting a new range of family beach holidays, aimed at the mass market. Do you think that this would be a good idea? Justify your answer.

7115_w11_qp_12

THEORY

2011

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Walt owns a company which has developed a new computer game for adults. A focus group report shows customers like it. Walt has been considering the marketing mix, including the packaging for this product which is likely to be sold in many countries. ‘I don’t want to use a wholesaler as it would affect my profit margin’ he said. What is meant by a ‘focus group’? Identify two reasons why packaging might be important for the new computer game. Reason 1: Reason 2: Explain why the profit margin might be important for Walt’s business. Identify and explain two advantages to Walt if he decided to use a wholesaler to distribute his products. Advantage 1: Explanation: Advantage 2: Explanation: Consider two possible methods of promotion that Walt could use for the new game. Recommend which method he should use. Justify your answer.

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THEORY

2015

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F&G is a leading fashion retailer. It has 20 shops in country C. The business uses market segmentation. Its target market is men aged between 25 and 40 years old. The Marketing Director has been looking at the marketing data shown in Table 1. She is worried that the amount the business spends on marketing is not cost effective. She would like to close down all F&G shops and just use e-commerce. Table 1 F&G’s marketing budget F&G’s market share Total value of the men’s clothing market Year $25m 15% $500m $40m 12% $700m What is meant by ‘marketing budget’? Calculate the value of F&G’s revenue in 2016. Identify and explain two benefits of market segmentation to F&G. Benefit 1: Explanation: Benefit 2: Explanation: 1 1 Identify and explain two possible reasons why the amount F&G spends on marketing might not be cost effective. Reason 1: Explanation: Reason 2: Explanation: Do you think F&G should close down all its shops and just use e-commerce? Justify your answer. [ 1 1

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THEORY

2016

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